How People Just Like You Planned Their Way to a Rich Retirement

The world is full of secrets. We may envy our neighbors next door, with their fancy new cars and in-ground pool, but we might simply be unaware that they're drowning in debt. (The average household with credit card debt owes roughly $16,000, and that's just the average!)

And then there is the neighbor on the other side of our house -- attracting very little attention, driving her 10-year-old car and walking her 8-year-old dog. What we don't know is that she's sitting on a retirement war chest of more than a million dollars, accumulated while she toiled at an ordinary job.

It's easy to assume that really fat bank or brokerage accounts are only for the wealthy and that the most we can hope for is to just get by. If you're earning, say, $45,000 per year and can't hope for much more than annual raises of 3%, it can be hard to imagine a comfy retirement.

Stop selling yourself short.

Meet the everyday millionaires

There are lots of examples of ordinary people who managed to accumulate great sums -- and you can do as well as them, or even better. Consider these four.

The determined washerwoman: First, there's Oseola McCarty. She's perhaps the most impressive example of how much someone can do with very little. She worked doing other people's laundry and never earned more than $9,000 in a year. Yet she managed to save more than a quarter of a million dollars. (Had she invested in stocks, she might have ended up with even more.)

The dropout dry cleaner: Another financial hero is Genesio Morlacci. A dry cleaner who became a part-time janitor in retirement, he died at age 102, leaving $2.3 million to a local university. He had only a third-grade education, but was good with numbers. He invested in real estate, bonds, and some stocks. (Interestingly, since stocks have tended to significantly outperform bonds and real estate over the long haul, Mr. Morlacci might have accumulated even more if he'd invested differently.)

The everyday entrepreneurs: Then there's Golda and Gilmore Reynolds, an unassuming couple in Indiana who surprised their town of Osgood by bequeathing $23 million. She had been a schoolteacher, and over the years they owned several small businesses, such as a car dealership and a tobacco shop. One trait of theirs was a love of stocks and investing, which enabled them to multiply their small fortune into a mammoth one.

The studious stock-picking teacher: Thomas Drey Jr., was a schoolteacher, too, until he retired. He spent a fair chunk of time at the Boston Public Library, studying stocks. The fact that he was able to leave $6.8 million to the library when he died suggests that he got very good at selecting smart investments. He wrote a book on the subject, as well -- America's 100 Best Growth Stocks.

Those are just a handful of many people who come from walks of life not so different from you and me.

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Clearly, these people amassed their money because they put their minds to it -- something any of us can do. The trick is to save aggressively and invest effectively.

Saving 10% of your income may not be enough, especially if you're starting a bit late. If you need to, you can employ some tricks to boost your saving and investing. For example, take on a second job for a while. Or simply work a few more years than you planned to before retiring. Taking in a boarder for a while can generate a lot of extra income. Or, if more extreme measures are warranted, consider moving into a smaller home -- or to a region with a lower cost of living.

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The next step is deploying that extra savings and maximizing its future growth. Parking your long-term money in low-interest bonds isn't going to build wealth very quickly. The most successful builders of long-term wealth look to the stock market to make their fortunes blossom.

Yes, the stock market can be volatile, but if you take the time to learn more about stocks, you can invest somewhat conservatively in stocks and still make good money.

And finally, don't totally deprive yourself, or you'll have very little chance of sticking with your plan. Genesio Morlacci took occasional trips to Italy. The Reynolds had a winter home in Florida. Enjoy your life, but do so with your eyes on the prize -- a cushy retirement.